Ministry of Social Development and Poverty Reduction

PART C – DECISION UNDER APPEAL The decision under appeal is the Ministry’s reconsideration decision dated June 28, 2018 which held that all of the appellant’s Canada Pension Plan Disability (CPP-D) benefit entitlement must be deducted from her disability assistance because her voluntary tax deduction is considered income and there are no permitted deductions or exemptions for it. PART D – RELEVANT LEGISLATION Employment and Assistance for Persons with Disabilities Regulation (EAPWDR), Sections 1, 9, 24 and 29 Schedule A – Sections 1, 2 and 4 Schedule B – Sections 1, 6 and 7

PART E – SUMMARY OF FACTS The Ministry was not in attendance at the hearing. After confirming that the Ministry was notified, the hearing proceeded under Section 86(b) of the Employment and Assistance Regulation. The evidence before the Ministry at the time of reconsideration was as follows: • The appellant is a sole recipient with Persons with Disabilities (PWD) designation, whose file has been open since July 11, 2016 • Until April 2018, the appellant received $1,245.42 disability assistance per month, consisting of $758.42 for support allowance, $375.00 for shelter allowance, $52.00 for transportation supplement and $60.00 for alcohol and drug supplement. In addition she has received $642.75 CPP-D per month since November 2017, which has been deducted from her assistance as unearned income • A Service Canada data match reported her April gross benefit as being $642.75; consequently the Ministry deducted $642.75 from her assistance. The appellant had declared $300 to the Ministry as her net April CPP-D benefit, as she had voluntarily requested that $342.75 of the $642.75 gross benefit be withheld to retire back taxes owed on a lump sum benefit payment received as a result of a divorce settlement and to offset taxes owed at the end of the year • A monthly report for the month of May 2018 and a copy of a Service Canada data match report for the month of April 2018 • The appellant’s Request for Reconsideration in which she states that she started receiving CCP-D in November 2017, including some back pay from which no tax was deducted. There was also no tax deducted at source for her monthly CPP-D benefit until April, when she voluntarily asked for $342.75 to be deducted from her $642.75 monthly benefit At the hearing, the appellant provided further clarification on her circumstances and Request for Reconsideration. She stated that: • She recently received a CPP-D lump sum benefit through a divorce settlement. The lump sum was for the retroactive years of 2013-2014 when she was living in another province and not collecting any assistance. No tax was deducted from the lump sum. She had to give her ex-husband 50% of the lump sum, however she is paying 100% of the tax on the lump sum • The lump sum was paid to her at the end of November 2017. She deducted this amount as unearned income from her assistance, which meant she didn’t receive any of her assistance that month • A couple of days later into December 2017, she received her first monthly disability pension payment from CPP-D. Normally, this payment accompanies any lump sum paid out on the same day. Due to an error with CCP-D it was issued a couple of days later. She then declared this second sum as unearned income from December and for a second month in a row did not receive any of her assistance • The appellant maintains that she has declared all gross CCP-D income since she began receiving it, and the Ministry is calculating her assistance based upon that gross amount rather than the net after voluntary tax removal income • In her reasons for Request for Reconsideration, the appellant notes that “as of 2003 there is a tax exemption” and in her Notice of Appeal she quotes the website that this exemption is listed on: https://www2.gov.bc.ca/gov/content/governments/policies-for-government/bcea-policy-and- procedure-manual/eligibility/income-treatment-and-exemptions. The appellant provided a copy of the following excerpt from the website at the hearing. The website details the following: “CPP Tax Exemption. Effective January 2003, there is a monthly tax exemption on gross CPP income for eligible clients. The amount of this CPP tax exemption will be automatically calculated by the system. The CPP tax exemption is based on a formula that estimates the monthly tax liability for each client, and replaces the CPP adjustment supplement. The maximum CPP tax exemption is $100 per month. This maximum does not apply to clients who are compensated via imprest cheque for their tax liability on retroactive payments assigned through the ISP1613 process. Clients will be responsible for all tax liabilities arising from CPP income received in 2003 and subsequent years. Clients must declare all gross CPP income on their Monthly Report (HR0081).”

The panel accepts the introduction of a copy of the “Tax Exemption” information from the B.C. Employment and Assistance Policy manual, which was mentioned in both the Request for Reconsideration and the Notice of Appeal as evidence in support of the appeal. The appellant maintains that the Ministry has not applied this “Tax Exemption” to her situation and that the amount the Ministry is deducting from her assistance each month is much higher than the legislated $100 limit. The panel makes the following findings of fact: - Beginning in April 2018, the appellant’s monthly assistance has been reduced to reflect the voluntary tax deduction by CPP-D of $342.75 she set up with Service Canada - The appellant has reported her CPP-D benefits since she began receiving them in November 2017 - The monthly amount of disability assistance calculated under Schedule A of $1,245.42 is not in dispute

PART F – REASONS FOR PANEL DECISION The issue before the panel is to determine the reasonableness of the Ministry’s reconsideration decision dated June 28, 2018 which held that all of the appellant’s Canada Pension Plan Disability (CPP-D) benefit entitlement must be deducted from her disability assistance because her voluntary tax deduction is considered unearned income and there are no permitted deductions or exemptions for it. This decision was based upon information submitted for the appeal and the legislation contained in the Employment and Assistance for Persons with Disabilities Regulation (EAPWDR), Sections 1, 9, 24 and 29, Schedule A – Sections 1, 2 and 4, and Schedule B – Sections 1, 6 and 7. Part 1 — Interpretation Definitions …"unearned income" means any income that is not earned income, and includes, without limitation, money or value received from any of the following: (a) money, annuities, stocks, bonds, shares, and interest bearing accounts or properties; (b) cooperative associations as defined in the Real Estate Development Marketing Act; (c) war disability pensions, military pensions and war veterans' allowances; (d) insurance benefits, except insurance paid as compensation for a destroyed asset; (e) superannuation benefits; (f) any type or class of Canada Pension Plan benefits; (g) employment insurance; (h) union or lodge benefits; (i) financial assistance provided under the Employment and Assistance Act or provided by another province or jurisdiction; (j) workers' compensation benefits and disability payments or pensions; (k) surviving spouses' or orphans' allowances; (l) a trust or inheritance; (m) rental of tools, vehicles or equipment; (n) rental of land, self-contained suites or other property except the place of residence of an applicant or recipient; (o) interest earned on a mortgage or agreement for sale; (p) maintenance under a court order, a separation agreement or other agreement; (q) education or training allowances, grants, loans, bursaries or scholarships; (r) a lottery or a game of chance; (s) awards of compensation under the Criminal Injury Compensation Act or awards of benefits under the Crime Victim Assistance Act, other than an award paid for repair or replacement of damaged or destroyed property;

(t) any other financial awards or compensation; (u) Federal Old Age Security and Guaranteed Income Supplement payments; (v) financial contributions made by a sponsor pursuant to an undertaking given for the purposes of the Immigration and Refugee Protection Act (Canada) or the Immigration Act (Canada); (w) tax refunds; (x) gifts of money, annuities, stocks, bonds, shares, and interest bearing accounts or properties; (y) gifts in the form of payment by another person of a debt or obligation. Limits on income 9 (1) For the purposes of the Act and this regulation, "income", in relation to a family unit, includes an amount garnished, attached, seized, deducted or set off from the income of an applicant, a recipient or a dependant. (2) A family unit is not eligible for disability assistance if the net income of the family unit determined under Schedule B equals or exceeds the amount of disability assistance determined under Schedule A for a family unit matching that family unit. Amount of disability assistance 24 Disability assistance may be provided to or for a family unit, for a calendar month, in an amount that is not more than (a) the amount determined under Schedule A, minus (b) the family unit's net income determined under Schedule B. [am. B.C. Reg. 175/2016, App. 1, s. 4.] Reporting requirement 29 For the purposes of section 11 (1) (a) [reporting obligations] of the Act, (a) the report must be submitted by the 5th day of the calendar month following the calendar month in which one or more of the following occur: (i) a change that is listed in paragraph (b) (i) to (v); (ii) a family unit receives earned income as set out in paragraph (b) (vi); (iii) a family unit receives unearned income that is compensation paid under section 29 or 30 of the Workers Compensation Act as set out in paragraph (b) (vii), and (b) the information required is all of the following, as requested in the monthly report form prescribed under the Forms Regulation, B.C. Reg. 87/2018: (i) change in the family unit's assets; (ii) change in income received by the family unit and the source of that income;

(iii) change in the employment and educational circumstances of recipients in the family unit; (iv) change in family unit membership or the marital status of a recipient; (v) any warrants as described in section 14.2 (1) of the Act; (vi) the amount of earned income received by the family unit in the calendar month and the source of that income; (vii) the amount of unearned income that is compensation paid under section 29 or 30 of the Workers Compensation Act received by the family unit in the calendar month. [en. B.C. Reg. 335/2007; am. B.C. Regs. 85/2012, Sch. 2, s. 4; 332/2012, s. 1; 226/2014, s. 1.] Voluntary reporting 29.1 For the purpose of the re-establishment of eligibility under section 4.4 [re-establishment of eligibility for disability assistance], voluntary reports may be submitted on a monthly basis in respect of a family unit described in that section in the same manner and using the same form as in section 29. [en. B.C. Reg. 175/2016, App. 1, s. 6.] Schedule A [am. B.C. Regs. 286/2003, s. 2 (b); 521/2004, s. 3; 164/2005; 306/2005, s. 6; 58/2007, s. 1; 70/2007, s. 2; 88/2008, App. 2, s. 2; 316/2008, s. (b); 62/2010 s. (b); 73/2010 s. 11; 197/2012, Sch. 2, ss. 9 and 10; 175/2016, App. 1, ss. 13 to 16.] Disability Assistance Rates (section 24 (a) ) Maximum amount of disability assistance before deduction of net income 1 (1) Subject to this section and sections 3 and 6 to 9 of this Schedule, the amount of disability assistance referred to in section 24 (a) [amount of disability assistance] of this regulation is the sum of (a) the monthly support allowance under section 2 of this Schedule for a family unit matching the family unit of the applicant or recipient, plus (b) the shelter allowance calculated under sections 4 and 5 of this Schedule. (2) Despite subsection (1), disability assistance may not be provided in respect of a dependent child if support for that child is provided under section 8 (2) or 93 (1) (g) (ii) of the Child, Family and Community Service Act. Schedule B Net Income Calculation (section 24 (b) )

Deduction and exemption rules 1 When calculating the net income of a family unit for the purposes of section 24 (b) [amount of disability assistance] of this regulation, (a) the following are exempt from income: (i) any income earned by a dependent child attending school on a full-time basis; (ii) Repealed [B.C. Reg. 96/2017]; (iii) Repealed. [B.C. Reg. 48/2010, Sch. 1, s. 2 (c).] (iv) a family bonus, except the portion treated as unearned income under section 10 (1) of this Schedule; (iv.1) the Canada child benefit, except the portion treated as unearned income under section 10 (1) of this Schedule; [B.C. Reg. 34/2017] (v) the basic child tax benefit; (vi) a goods and services tax credit under the Income Tax Act (Canada); (vii) a tax credit under section 8 [refundable sales tax credit], 8.1 [low income climate action tax credit] or 8.2 [BC harmonized sales tax credit] of the Income Tax Act (British Columbia); (viii) individual redress payments granted by the government of Canada to a person of Japanese ancestry; (ix) individual payments granted by the government of Canada under the Extraordinary Assistance Plan to a person infected by the human immunodeficiency virus; (x) individual payments granted by the government of British Columbia to a person infected by the human immunodeficiency virus or to the surviving spouse or dependent children of that person; (xi) individual payments granted by the government of Canada under the Extraordinary Assistance Plan to thalidomide victims; (xii) money that is (A) paid or payable to a person if the money is awarded to the person by an adjudicative panel in respect of claims of abuse at Jericho Hill School for the Deaf and drawn from a lump sum settlement paid by the government of British Columbia, or (B) paid or payable to or for a person if the payment is in accordance with the settlement agreement approved by the Supreme Court in Action No. C980463, Vancouver Registry; (xiii) the BC earned income benefit; (xiv) money paid or payable under the 1986-1990 Hepatitis C Settlement Agreement made June 15, 1999, except money paid or payable under section 4.02 or 6.01 of Schedule A or of Schedule B of that agreement; (xv) a rent subsidy provided by the provincial government, or by a council, board, society or governmental agency that administers rent subsidies from the provincial government; (xvi) Repealed. [B.C. Reg. 197/2012, Sch. 2, s. 11 (a).]

(xvii) money paid or payable to a person in settlement of a claim of abuse at an Indian residential school, except money paid or payable as income replacement in the settlement; (xviii) post adoption assistance payments provided under section 28 (1) or 30.1 of the Adoption Regulation, B.C. Reg. 291/96; (xix) a rebate of energy or fuel tax provided by the government of Canada, the government of British Columbia, or an agency of either government; (xx) money paid by the government of British Columbia, under a written agreement, to a person with disabilities or to a trustee for the benefit of a person with disabilities to enable the person with disabilities to live in the community instead of in an institution; (xxi) Repealed. [B.C. Reg. 85/2012, Sch. 2, s. 7.] (xxii) payments granted by the government of British Columbia under section 8 [agreement with child's kin and others] of the Child, Family and Community Service Act; (xxiii) payments granted by the government of British Columbia under the Ministry of Children and Family Development's At Home Program; (xxiv) Repealed. [B.C. Reg. 85/2012, Sch. 2, s. 7.] (xxv) payments granted by the government of British Columbia under an agreement referred to in section 93 (1) (g) (ii) of the Child, Family and Community Service Act, for contributions to the support of a child; (xxvi) a loan that is (A) not greater than the amount contemplated by the recipient's business plan, accepted by the minister under section 70.1 of this regulation, and (B) received and used for the purposes set out in the business plan; (xxvii) payments granted by the government of British Columbia under the Ministry of Children and Family Development's (A) Autism Funding: Under Age 6 Program, or (B) Autism Funding: Ages 6 — 18 Program; (xxviii) Repealed. [B.C. Reg. 148/2015, App. 2, s. 1 (a).] (xxix) payments made by a health authority or a contractor of a health authority to a recipient, who is a "person with a mental disorder" as defined in section 1 of the Mental Health Act, for the purpose of supporting the recipient in participating in a volunteer program or in a mental health or addictions rehabilitation program; (xxx) a refund provided under Plan I as established under the Drug Plans Regulation; (xxxi) payments provided by Community Living BC to assist with travel expenses for a recipient in the family unit to attend a self-help skills program, or a supported work placement program, approved by Community Living BC; (xxxii) a Universal Child Care Benefit provided under the Universal Child Care Benefit Act (Canada); (xxxiii) money paid by the government of Canada, under a settlement agreement, to persons who contracted Hepatitis C by receiving blood or blood products in Canada prior to 1986 or after July 1,

1990, except money paid under that agreement as income replacement; (xxxiv) money withdrawn from a registered disability savings plan; (xxxv) a working income tax benefit provided under the Income Tax Act (Canada); (xxxvi) Repealed. [B.C. Reg. 180/2010, s. 2 (b).] (xxxvii) the climate action dividend under section 13.02 of the Income Tax Act; (xxxviii) money paid or payable to a person under the Criminal Injury Compensation Act as compensation for non-pecuniary loss or damage for pain, suffering mental or emotional trauma, humiliation or inconvenience that occurred when the person was under 19 years of age; (xxxix) money that is paid or payable to or for a person if the payment is in accordance with the settlement agreement approved by the Supreme Court in Action No. S024338, Vancouver Registry; (xl) payments granted by the government of British Columbia under the Ministry of Children and Family Development's Family Support Services program; (xli) payments granted by the government of British Columbia under the Ministry of Children and Family Development's Supported Child Development program; (xlii) payments granted by the government of British Columbia under the Ministry of Children and Family Development's Aboriginal Supported Child Development program; (xliii) money paid or payable from a fund that is established by the government of British Columbia, the government of Canada and the City of Vancouver in relation to recommendation 3.2 of the final report of the Missing Women Commission of Inquiry; (xliv) payments granted by the government of British Columbia under the Temporary Education Support for Parents program; (xlv) a BC early childhood tax benefit; (xlvi) child support; (xlvii) orphan's benefits under the Canada Pension Plan Act (Canada); (xlviii) money or other value received, by will or as the result of intestacy, from the estate of a deceased person; (xlix) gifts; (l) education and training allowances, grants, bursaries or scholarships, other than student financial assistance; (li) money withdrawn from a registered education savings plan; (lii) compensation paid or payable under section 17 [compensation in fatal cases] or 18 [addition to payments] of the Workers Compensation Act to a dependant, as defined in section 1 of that Act, who is a child, as defined in section 17 of that Act; (liii) money that is paid or payable by or for Community Living BC to or for a person if the payment is in accordance with an award in a legal proceeding or with a settlement agreement in respect of a claim for injury, loss or damage caused by Community Living BC, an employee of Community Living BC or a person retained under a contract to perform services for Community Living BC;

(liv) money that is paid or payable by the government of British Columbia to or for a person if the payment is in accordance with an award in a legal proceeding or with a settlement agreement in respect of a claim for injury, loss or damage caused by the minister, the ministry, an employee of the ministry or a person retained under a contract to perform services for the ministry; (liv.1) money that is paid or payable by the government of British Columbia to or for a person if the payment is in accordance with an award in a legal proceeding or with a settlement agreement in respect of a claim for injury, loss or damage caused by the Minister of Children and Family Development, that ministry, an employee of that ministry or a person retained under a contract to perform services for that ministry [B.C. Reg. /2018]; (liv.2) money that is paid or payable by the government of British Columbia to or for a person because the person was a resident of Woodlands School [B.C. Reg. /2018] ; (lv) a disabled contributor's child's benefit paid or payable under the Canada Pension Plan; (lvi) payments granted under an agreement referred to in section 94 of the Child , Family and Community Service Act; (lvii) money that is paid or payable, in respect of a child, from property that comes into the control of, or is held by, the Public Guardian and Trustee; (lviii) money that is paid or payable from a settlement in respect of Treaty No. 8 agricultural benefits [B.C. Reg. 179/2017], (b) any amount garnished, attached, seized, deducted or set off from income is considered to be income, except the deductions permitted under sections 2 and 6, (c) all earned income must be included, except the deductions permitted under section 2 and any earned income exempted under sections 3 and 4, and (d) all unearned income must be included, except the deductions permitted under section 6 and any income exempted under sections 3, 7 and 8. Deductions from unearned income 6 The only deductions permitted from unearned income are the following: (a) any income tax deducted at source from employment insurance benefits; (b) essential operating costs of renting self-contained suites. Exemptions — unearned income 7 (0.1) In this section: "disability-related cost" means a disability-related cost referred to in paragraph (a), (b), (c) or (e) of the definition of disability-related cost in section 12 (1) [assets held in trust for person with disabilities] of this regulation; "disability-related cost to promote independence" means a disability-related cost referred to in paragraph (d) of the definition of disability-related cost in section 12 (1) of this regulation; "intended registered disability savings plan or trust" , in relation to a person referred to in section 12.1 (2) [temporary exemption of assets for person with disabilities or person receiving special care] of this regulation, means an asset, received by the person, to which the exemption under that section applies;